The freezing, and the pain to come.

tinkerbel

Hello FP! I've jst stumbled on and read your whole thread and I think I'll subscribe - that means you have to post regularly to keep me entertained!!

It sounds like you've got a good grasp on things and you can at least recognise your weaknesses! I think you need to stop buying rounds though, and maybe when you go out, buy your own drinks and alternate something cheaper and non-alcoholic with beer/whatever - better for the wallet and the waistline!

I'm very impressed with your cycling though! I've reccently moved to the city and I want to get my bf cycling to work when he gets a job!

I think you need to listen to some people on here though and stop grabbing fast food. it is quite expensive and its not very good for you. taking your own lunches is good as long as you dont get bored of them!

Anyway, you've done 2 debts this month, what's the next challenge?? The Overdraft seems the most sensible to me!

financial_planner

Hi everyone,

Thanks for bearing with me. The last month was very frustrating because I was recovering from the operation. And then, I got back in the swing of things and before I knew it, the old habits reappeared. What can you do? I think in the grand scheme of things this is all par for the course, theres no point pretending that you aren't going to fall off the wagon because inevitably you will, the question is how quickly you can get back up again!

The point was raised about snowballing. I presume this is about paying off your debts with the highest interest first? Sounds like a very sensible plan, particularly now I know I have this small windfall coming, eg in the form of a bonus.

Of course, before I sit down and work this out, I thought it was worth looking at the balance transfer situation one more time. It turned out that my credit rating was perhaps not as trashed as I expected, and I was accepted for a new credit card with 22 month 0% balance transfer. :money: So, I'm just waiting now to see my new credit limit. and, hopefully, Ill be able to transfer all or part of my credit card balance over to that card.

As for my overdraft, well, to be honest I have poor form when it comes to paying off overdrafts. I am paying 20% and at the moment this is translating in to a monthly fee of around £24 - as for part of the month, im only slightly in the red. So that represents interest of about 12%, on average.

The credit card debt, on the other hand, is more serious. Looking at it a bit more forensically, I have exactly 4,598 on card 1, which is divided up into £4000 at 0% and £598 at 17.9% (about £8 per month). Card 2, on the other hand, has £4,840 currently at 16%. - or £59 per month.

So, on balance, the costs of servicing the credit card debt (at is higher than servicing the overdraft, as long as I don't go over the overdraft.

What i'll have to do is wait and see what the credit limit is on the new card, transfer as much of it over as possible, and then start paying off the highest interest debt first. I can already see that the predicted £1000 payment next month, will 'save' me from paying up to £15 a month in interest, which I can then use to clear yet more of my debt than I would have been able to before.

And, I have still to look at my actual spending patterns! Although, I now have a months worth of data to do just that, and come up with a plan for november.

Cheers
FP

tinkerbel

Wow FP that all sounds very organised of you! well done for getting the 0% deal I hope you get a big enough limit but its fab that that will buy you some breathing room and the extra interest you are saving can just be used to hound down the other debts!

I'd be interested to see your months spending data because I've almost got a month (1st Nov) and it'd be interesting to compare! where are you spending the most..? What are you shocked by etc..?!

financial_planner

Okay, I have just downloaded my spending habits for 22nd September - 22nd October.

I should note that, whilst I have returned in some ways to my previous psychological addiction to minor, frivolous and pointless spending habits, by most accounts this was a very austere month. The only vaguely extravagant thing I did was travel out to the countryside for a friends wedding, got drunk, missed the last train etc, as reported previously. My drinking largely went unchecked, although it was mostly at home and not in the pub.I also spent part of the month at at my parents house after the operation. I didn't buy any clothes, books, or anything other than the basic essentials.

the total spending, in any case was as follows:

total cash £205 (mostly entertainment, I think)
total groceries £99.56
total fast food £76.97
total travel: £74.70

total £456.23


I thought I would contrast it with 15th April - 15th May, 2011. It was shocking. During those weeks, I burned through £1311.20. This was mostly thanks to a stag do, a cycling trip to belgium, and a visit to Scotland over easter (spending £326 on travel tickets alone). I also spent £150 on clothes. So, back then, its just one more example of living way beyond my means.

April - May

cash 525.01
clothes 150.90
entertainment 62.70
fast food 132.45
groceries 113.61
travel £326.53

total £1311.20

savingholmes

Hi FP - what a fantastic turnaround - really pleased for you. Some great figures there and moving to a 0% deal should be just the motivation you need to turn things around. At least that way you know the debt is actually going down and its not just interest you're paying....

chevalier

Wow that is an awesome difference in spending, even if some of the overspend previously was to do with one off things.

One thing that strikes me ref your current spending was the amount of take away spending....is this something to address?

Do you have clothes etc that you can ebay perhaps to release some of the money tied up in them?
chev

miggy

Hi FP,

That's really impressive! Seeing it set down as a contrast is very effective; shows what can be done. Total saving of £854.97!!!

:T:T:T

financial_planner

Ok, well, i'm now about 6 weeks since my light bulb moment. I can honestly say that little has changed in my life. I'm pretty sure I attended all the social events I would have anyway, but maybe avoided a few pointless and expensive 'drinks'. The last month was rather disorganised, the main principle I followed was just to avoid any excessive spending, I kept it all small scale, and kept going back to the task at hand – getting my spending under control. Cycling to work reduced my daily expenditure by about half. There have been one or two moments where I have bought ready meals and bottles of wine, but they were on my debit card and not on my credit card, and I kept my eye on the amount of money in the account. And as a result I was able to save about £800 and pay off two of my debts.

I also took steps to restructure my other debts, so I am no longer paying 18% interest on them. A simple step, but one that means I'll be about £60 better off each month. If I can pay off my overdraft in three months or so, I wont be paying any interest on my debts at all.

In consequence, the path is now clear ahead of me to pay off my debt, if I can just keep myself on it. Most of the debt is on credit cards, and they are in turn frozen (literally!), so I just have what is in my bank account. Admittedly I have an overdraft, something that has caused me a lot of problems over the past decade. But if there's one thing I have learned, its not to let my affairs get too messy by opening lots of different accounts. I already have the problem of having another set of financial affairs in Finland, and I have a short attention span when it comes to my finances generally, so my principle going forward is just to keep everything as simple as possible. Coupons etc might work for me. Taking advantage of introductory gambling offers would be a terrible idea. I need to use ebay more and cut down on my fast food. Agreed.

And with these goals in mind, I have decided to experiment with a system where I just give myself £100 'pocket money' per week. Its almost like I am going back to being a kid again. The thing is that I could go through spending diaries, spreadsheets, all sorts of very complicated mechanisms of controlling my finances, and I've done this before. In the same way that I've created fitness plans, and tried to learn how to cook and speak Chinese. They all failed, and lay in ruins, and I felt bad about it all, and then it became impossible to pick myself up after the initial failure. It'll be interesting to see how this £100 per week plan goes on, and of course, i'll report it back here.

This time around, there is no grand plan, just an endless realisation of all the problems I have got myself in to in the past, and the need to just keep working at them. I really think this is the best way forward, in the short term. If I can keep to the £100 per week plan, I can pay off £600 against my debt each month. Slowly, I'll start to budget and get my head around my finances, I'm pretty sure of that. Of course, there will be moments where I slip up and spend hundreds of pounds on utter nonsense. But, all I can do is get back on with the plan. That's all there is!

As for the second job idea, its fine, and I might look to pick up a few more shifts in pubs that I like in my local area. Better to be behind the bar than on the other side of it, getting myself in to more debt. I might even make a bit of money, particularly over xmas and new year. But it's no answer to my financial predicament. It would make a lot more sense for me to focus on getting promoted at work. I currently earn £30000 per year. I could very easily increase this to £35000 -£40,000. I'm already working way beyond my job description, and I think if I really take it all seriously and stop living my life in an alcoholic blur, then I'm sure its actually just a formality to get promoted, to some part of the organisation I work for. Thing is, I've not even tried to get promoted, I couldn't be bothered to fill out the forms. How stupid I've been. Focussing my energies on getting promoted would be better than working in a bar as a long term financial solution to my problems. So my focus should be on working on filling out job application forms, not being a uber taxed minimum wage slave in a bar.

Thanks all for reading, and your helpful ideas, suggestions and everything else. It really is good, and i'll post again soon.

Cheers
FP

miggy

You say little has changed but... a saving of £800! You must be doing something differently!

It's impressive how your planning has enabled you to do this. Have you run some of your usual spends through the 'Demotivator' (link to the right of this page)? It shows up how seemingly small things add up - but I guess you know that. Fun to play around with, though.

With regard to your 'pocket money' budget, may I suggest you take it a week at a time and bear in mind it will be a learning experience? There will be surprises - and if it ever goes off course, all isn't lost provided you analyse what's happened and try to reduce the chances of it happening again.

You've got your money-control off to a solid start. Now, as you say, you have to get your head down and keep chipping away at it, but one day you'll beat that overdraft! A few months ago I was staring at an OD that we kept dipping into but we've been working at it. This morning when I went into online banking I had a new experience - the amount available for use was quite a bit bigger than the allowable OD! In other words, if all else is equal (which it isn't, but there are now savings to help), when we get to the end of this month there should be a surplus! Wow. Anyway that's to show you it really can happen. Just keep at it.

financial_planner

HI

A good week, all in all - until last night anyway. I kept within my hundred pound budget and even managed to save £10, whilst splashing out on seven pairs of new socks - 91% cotton from M&S - costing me £12. I needed the socks but thought about the purchase carefully. Amazing how a couple of months ago I would have whacked it on the credit card without thinking twice.

And then, last night I went out for a planned meal with friends on the other side of London. I returned having drank far too much beer and £60 poorer. I knew this would happen, of course. There was a grim inevitability about it. But what the hay, life goes on and I only have to survive until next friday until I get more money to burn. Planned my one 'night out' next week - I'm going to Bristol to watch a band, so I suspect the same thing will happen next week as well. Trying to minimise the damage by booking train tickets in advance.

It's probably fair to say this isn't the best way to live, but its the only option I have, to be honest. Of course these events are all rather wasteful and pointless. The thing that gets me is that many of the people I meet when I am on these nights out are all spending as much money as I am - and more - and many of them don't seem to even have real jobs. Where does their money come from? I guess they are either in massive amounts of debt or have some kind of hereditory wealth that they are frittering away extravagantly. Or perhaps a bit of both. A pint of beer in London now costs £3.75. Realistically a trip to the pub costs at least £15, rising to £25 if you throw in a cheap meal. I just sort of shrug my shoulders about the whole thing.

Anyway, a couple of weeks ago I decided it would be best to focus my DFW ambitions on getting promoted at work. Last week I filled out a job application form for the first time in over a year. It was damn hard work and must have taken me the best part of eight hours. I don't know how it will turn out but the important thing is I tried, and I'm going to keep trying. I spoke to my boss at work (we are quite good friends and actually in quite similar situations) and she told me that she had set herself the ambition of one application form a week, so I think I will do the same.

And, i'll definetly give the demotivator a try. It looks like I will be having a very cheap weekend due to my binge yesterday and the MSE activities are a key priority for me.

Cheers
FP.